Nifty Bank weekly, monthly F&O contracts to expire on Fridays from July 14

Stock exchange NSE on Tuesday said the expiry of Nifty Bank will now take place on Fridays as against existing trend of Thursdays. The change will be effective from July 7. All contracts with Thursday expiry will be revised to Friday on July 6. The first Friday expiry will be on July 14, the stock exchange said.

At present, weekly expiry takes place on Thursday of every week, except for the expiry week of monthly contracts. With the revised expiry day, all existing weekly contracts will expire on Friday of every week. If Friday is an holiday, then the expiry day will be the previous trading day, NSE said.

Besides, while monthly and quarterly expiries take place on the last Thursday of a month so far, as per the new changes, all monthly contracts will expire on last Friday of the respective contract month. Here also, if Friday is a holiday, the expiry day will be the previous day. NSE said its decision was based on the feedback it received from the market participants.

Sarvjeet Virk, Co-founder and MD, Finvasia said, "The new process of expanding trading hours and moving the expiry of F&O contracts to Friday will provide customers with more time to trade, assess market conditions, and manage risks effectively before the expiry. On one hand, the market volatility will be in check, and on the other, one will see a stark reduction in weekend risks, both of which bring significant advantages for the traders. Moreover, the increased trading day presents a valuable opportunity for funds and option writers to collect higher premiums and boost derivative volumes. I believe these changes will greatly benefit market participants and contribute to the overall growth and stability of the market."

Watch: Bank Nifty weekly, monthly F&O contracts expiry day revised to Friday; What it means for traders, NSE

To recall, peer BSE recently relaunched Bankex and Sensex derivative contracts in its bid to boost derivative trading at the exchange. The relaunch of derivative contracts came with a reduced lot size of futures and options and a new expiry cycle of Friday from Thursday earlier. NSE too cut Nifty Bank's lot size to 15 from 25 from July monthly expiry. This is even as it kept lot sizes of derivatives contracts on other indices unchanged.

Derivatives are the type of financial contracts whose value is dependent on an underlying asset, group of assets, or benchmark. A derivative is set between two or more parties that can trade on an exchange or over the counter (OTC). Derivatives are usually leveraged instruments, which increases their potential risk and reward. Usually, they are used to hedge against the risk against the assets in the equity markets.

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